Morning Folks!!
If you have paid attention to what I have been saying about the economy you also know I believe that 2011 will be the toughest year so far. It takes years for the current situation to trickle down. That is what is coming and a lot of desperation may be weaved within it.
I already hear you saying, “There he goes again”. Well think of me as a weatherman. If I told you that a torrential rainstorm was coming tomorrow, you just may opt not to wear those $500 shoes you just bought. That is all I am doing. Alerting you to the economic weather and how it affects us.
Truly you don’t have to be a rocket scientist to understand that cash flow is the 2000lb gorilla in the room. I don’t care who you are or how much you make, if the cash stops flowing, you may collapse and choke before you know what hit ya.
So if you look at history the spigots started softening in 2007. When we hit New York TRAFFIC in Fall 2008 the crash was just happening. But that crash takes YEARS to trickle down to us. Years.
So the average person has bills that exceed their income. However many had savings and assets and were able to fill in the gap relatively comfortably until NOW!
Enter 2011. That is when the “Suffocation” truly begins. For some in happened in 2008. They were over extended, had little cash reserves, were all in….and then…….BUST. Caught flat footed in an economic storm they never saw coming. THEY SHOULD HAVE SEEN IT COMING!! Those folks are gone and you won't be hearing from them for a very long time. You don't know who they are because they don't make a huge announcement that they lost everything.
Even if you don’t see it coming you have to always progress with a certain degree of caution. Not every day is a sunny day. Not every deal works.
So what I see is almost everyone getting weaker month, by month, by month. That depends how much cash reserves you have. How much assets you have. Most importantly, which assets are liquid. Which assets are not depreciating. Which assets are really liabilities.
Then of course are those liabilities. The anchor that can sink the biggest no matter how big you are. The bigger you are, the harder you fall. That comes from the liabilities and they can fold a business like a house of cards faster than you can imagine.
So here we are on the eve of 2011. If you have read what I have said over the years you will know that this is when it is time to START being concerned. They may have saved the institutions, but they sure as hell have not done a thing for you and me other than to hand us the bill.
That BURDEN is coming. The unrest in Europe will soon spread to America. If you think you can be all business and not pay attention to politics and current events, that may have worked most of our lives, I don’t see that working anymore.
So 2011 we march into. Most will continue to get weaker. Have less money. Do less things. Take less risk. But you never have to settle to be part of the “Most”. You can be smarter. You can pay attention. You can be aware. You can use the weakness to gain strength. But you can’t do any of this if you don’t understand where we are economically, historically, politically.
My gift has always been being able to see around the corner. See further and understand some very simple things that have HUGE impacts that most people miss and if I were to articulate it few would agree. But it keeps proving itself to be accurate. Very accurate for many years. I see what I see and I interpret it. That allows me to walk in between those storm clouds when I want and get rain when I want. To navigate and miss the worst part. Like having a radar system while others just look at the sky. That would be an edge that if used correctly would pay dividends in one way or another.
Nobody is immune to cash flow problems. Soon it could turn into an epidemic. All I know for sure is that you have to work 3x has hard now and you still won’t be back to 2007 for a number of years.
Those that have experienced these downturns before do have an edge. If you saw it coming in 2007 you have an edge. If you have prepared, you have an edge. If you have your bills in check, you have an edge. These times are about “Edges”. Those with the edge……WIN!
I hope this post, gives you an edge.
Have a GREAT Day!
Rick Schwartz
Anthony
Perfect forecast for a perfect storm … excellent post Rick :)
owen frager
You have been right all along and not we are standing at the edge of chaos- Europe is melting down- MUST SEE
http://www.collapsenet.com/index.php?option=com_k2&view=itemlist&layout=category&task=category&id=2&Itemid=95
Jackie Joyce
Rick Schwartz your the fucking man! Every time I read what you write I get pumped up and motivated to take care of business. Your blog is the shit! Thank you for always taking the time to share your valuable thoughts about life and business, your an inspiration to a lot of people, especially the younger generation of up and coming entrepreneurs who are about to experience this full blown shit storm unfolding right now. It’s a shit storm like no other, and the next phase like you said is about to unfold. Your blog post’s are a reality check. I’ve read them all, sometimes two and three times or more. Everything you have said is true. Your descriptions of what was going to happen in real estate, how shopping malls and plazas and main street were going to suffer. It’s all happening, I drive around here in Florida and see numerous plazas, half full,”for rent” signs up, etc…nothing is going to go into any of these spots any time soon. You can only stick so many cell phone stores, pizza parlors and hair/nail salons in these plazas. Those empty stores are lost cash flow streams, plus they hurt morale in these town’s, which slows things down even more. I’m staying positive, reading as much as I can as I plan my moves. Your blog is like a Maine Lighthouse in a January Blizzard!!! Here it is Saturday Morning, where a lot of people are still in bed hung over, and Rick Schwartz is up early taking care of business. It’s no time to party in these economic times, it’s time to work 7 days a week and stick a few beers in between while we work! Thank you for sharing your knowledge and awareness!!! Your helping a lot of people get their shit straight my man!
BillW
@Owen….just an FYI on your link they want you to pay for a subscription to get the info.
Jackie Joyce
One more thing I wanted to add Rick, how about another piece to all you have discussed, how about the inevitable”Student Loan Meltdown”? Yes thats right, student loan debt has now surpassed credit card debt in this country. I would love to hear your thoughts on this. Take a look everyone:
http://www.consumerismcommentary.com/student-loan-debt-surpasses-credit-card-debt/
I believe that this student loan bubble/crisis/meltdown is going to start to pick up steam in the next year or so. This is no joke, and with all that has been going on in real estate and credit, a lot of people have missed talking about this. I’m sure Rick Schwartz could go into detail better than I ever could on how this impacts cash flow. Those $200, $300, $500 a month student loan payments can only be deferred for so long, that is money which is now not going to go into retail, the local bar or restaurant, thats cash flow going out the door BEFORE ALL OTHER EXPENSES BECAUSE YOU CANT WRITE STUDENT LOANS OFF IN BANKRUPTCY. Many students thought they were going to graduate and have jobs that paid 50 or 75 grand, now they are lucky to have 20-30 grand jobs, or no job at all! Thats all potential cash flow that isn’t going to happen, I could go on as their is more to say that is far worse, but would love to hear your thoughts…
Its funny, I had been thinking about this all week, and after getting all fired up reading your cash flow blog post today, I just decided to register:
StudentLoanMeltdown.com
Bill Carson
If you haven’t noticed yet (and not many have) there’s a currency war currently being conducted in stealth… GOT GOLD? …
http://www.youtube.com/watch?v=ckFfzoplC-I
http://www.usfunds.com/interactive/whats-driving-gold/
BullShitwebsites
Right on Rick, that why to save $$$$, I am not going to the S.Beach conference.
Tim Davids
@Bullshit…400 peeps spending a total of $2500 each to go to a conference = One million dollars…they could nearly buy Detroit with that much dough!
rjb
Is the worst of this recession/depression behind us though?
From what I’ve read the consensus seems to be we are recovering but just at a veeeery slow pace, and it will be a choppy recovery.
Hopefully we won’t see anything like late 2008 and early 2009 again.
Or are you saying we’re heading into another tailspin here? I agree that a lot of people probably dipped into savings to help get through the last two years, and if those people still haven’t improved their job situation things could get worse for them.
Bill Carson
In this stage, the purchasing power of your currency will be sent through the floor, and the sheeple wont really understand whats happening, because in NOMINAL TEMRS things wont look as bad as the crash of 2008, but in REAL TERMS, you’ll have to work alot harder to stay at previous levels (if your lucky).
BillW
@rjb…
Some people are predicting a”W” shaped recover, with the USA heading to the second dip of the W.
The severity of the recession depends on where you live and what your”local” economy is doing. Certainly some cities and states are faring better than others, some states like Florida and Nevada have a long road to recovery.
Another important factor that could eventually get thing moving in a postive direction is consumer and business confidence. Until businesses are willing to invest and create jobs, and until consumers are willing to spend a bit more we stuck in the trenchs and that could be the pattern we see for years to come.
All in all Ricks advice is good. Plan for the worst and hope for the best. Cash is King.
Anunt
On August 24, 2010…Rick posted an article about Tony Robbins who sees an economic collapse coming soon.
Guess what??? You were WRONG!
Since that post, the stock market had one of the biggest gains upwards in over 100 years.
My point: When big boys say there is a huge meltdown coming…most likely the opposite usually happens…
Conclusion: in 2011, since Rick expects a melt down…be ready for a big huge move up in the stock market.
BullShitwebsites said…
Right on Rick, that why to save $$$$, I am not going to the S.Beach conference.
LOL…that’s funny…this should be on domaingang.com …LOL
BillW
@Anunt….geez give Tony Robbins more than 30 days for his prediction to pan out, his comment was made only 5 weeks ago. Who do you think he is Moses?
And take Rick’s advice for what its worth and lets all hope he is wrong.
Web Domains Buy
Have you seen the prices they are charger for rent? The little stores can’t make any profits. The malls kept on raising the prices as the property value went up. The stores would go out of business losing foot traffic and then more stores would go out of business. As soon as they reduce the rent I am sure people will start opening stores up again.
Roderick Pagnossin, Goodkarmaco
Not counting food or energy when calculating inflation makes it so according to our economic leaders.
Prosperity for all?
Well maybe but first all the worlds paper money systems are in a freefall crash.
Huw
So start offloading those premiums NOW before the arse end falls out of it!!
There’s lovely profit in chaos.. isn’t there Rick :wink:
Chadi
But there is also hyperinflation:
http://www.zerohedge.com/article/why-qe2-qe-lite-may-mean-fed-will-purchase-almost-3-trillion-treasurys-and-set-stage-monetar
So, on the bright side folks, your domains could be one of your safest assets (less effected by wars and physical damage although ADV money could significantly drop)…
Cash is what you need in an amount just to survive through, and I mean just enough not to collapse…
Politics is our daily oxygen here in the MiddleEast; and we’ve sure learned long ago the art of the Phoenix (being reborn after death from dust and ashes)…
From my current perspective, Gold and Generic Domains are the safest investments… Currencies, Stocks and Bonds could be a double edged sword… When I bought Gold at 600$, everyone thought I’m crazy. The Bank Manager almost punched me in the face for withdrawing cash for Gold… My family looked at me like this freak… Hell, even my dog barked in my face…
I risked 80% of my assets on Gold physical gold), and so, I more than doubled…
Now, I have the same feeling about Domains that I had then about Gold… (not any domains)…
However, I believe that the point Rick is making is basically, being smart about each and every move, and having a more piercing eye for what will be of profit and what will be of liability…
Cash is needed like oxygen in amounts for instant survival purposes, not for accumulation at this point…
chris
totally agree with you on that rick.
in australia we have missed the whole thing due to huge resource exports to china that protected us.
people are buying $1m+ houses with competition.
im using the approach that another 5 years we will have another playing field with marketing of keyword.cctlds and the .com’s will go settle down with internet tv and other technologies coming into play….a marketers paradise.
when times are tough there are plenty of people around that can take care of those willing to sell at not so high price or even a loss and things work out.
but its just a domain name at the end of the day and people need to live if times are tough make sure your ok first.
Main thing is dont panic or be greedy and take care of debts first so you sleep better and without stress.
make sure you benefit if you sell.
r a j
However stocks
continue to march higher – right along there
with Gold. All the bankers I know that took packages and were laid off are back on thie feet. NYC restaurants continue to pack in the crowds. What gives Rick?”Experts” are predicting monster stock rallies into 2011.
Le Blatte
Nice lesson!
Thanks Rick
Bill Carson
For those that think stocks have been doing good … just look at the DOW when measured against Gold … the DOW has gone nowhere when compared to Gold over the past 5 years (except for a few exceptions, like Apple, Baidu, and a very small handful of others)… http://www.webpennys.com/profiles/index.html
LR
If you have the foresight to select and recognize that the future of domains lie in business and marketing generic domains, you will make wise choices.
With that said discussions here and at Traffic conferences should also be about Web 3.0 and what the future holds regarding domains and upcoming web technology.
NetJohn
“Where there is Turmoil…There Is Opportunity ! — Don’t Wait for Your Ship To Come In…Swim Out To It ! ….When the Go’in Gets Tough—> Well, you know the rest…Nuff Said !
Anunt
October 5th 2010
Dow +193.45 …..10,944
Nasdaq +55.31…..2399
S&P +23.71 …..1160
hahahahahahahahahahahaaaaaaa
easy money!!!!!!!!!!!!!!!!!!!
Bill Carson
Still underperformed Gold today… as well as every year over the past 10 years.
Bill Carson
You also forgot to mention the US Dollar declined by almost 1% in value today … in fact, when you account for the loss in value of the US Dollar over the past decade, the major indexes are WAY UNDERWATER.